Business Issues

Critical Thinking : Primary Management Practices Is Everything

by Dr KC Chan and Priscilla Tanjung

In 2003, Nitin Nohria, the current dean of
Harvard Business School, identified the
“Must Have’s” management practices
based on a five-year study of winning
firms that truly produced business results. Nevertheless, these primary management
practices needed to be reinforced by four
secondary management practices for perpetual
business excellence. See Figure 1.

Figure 1. Primary and Secondary Management Practices

Besides identifying the “4 Plus 4” management
practices that can significantly affect a firm’s
performance, the study developed a list of
organisational behaviours that support excellence
in each practice.

Organisational Behaviours at Primary
Management Practices:

• Strategy

Build a strategy around a clear value
proposition for the customer.

Develop strategy from the “outside in” based
on what your stakeholders, i.e. customers,
partners and investors have to say and how
they behave.

Continually fine-tune your strategy base
on changes in the marketplace, e.g. a new
technology, a social trend, a government
regulation or a competitor’s breakaway
product. Critical thinking is the essence of an
adaptive strategy.

Clearly communicate your strategy within
the organization and to customers and other
external stakeholders.

Keep focused. Grow your core business and
beware of the unfamiliar.

Whatever is the chosen strategy, whether it is cost
leadership or product innovation, it will work only
if it is sharply defined, clearly communicated and
well-understood by stakeholders, i.e. employees,
customers, partners, investors, etc.

Put decision-making authority close to the
front line so employees can react quickly to
changing market conditions. Critical thinking
is most need where the action is.

Constantly strive to eliminate all forms of
excess and waste; improve productivity at a
rate that is roughly twice the industry average.
Try to attain maximum utilisation of resources
to achieve best unit cost as benchmark.

Develop and maintain diligent operational
execution. You may not always delight your
customers, but make sure never to disappoint
them, i.e. stakeholder expectations management
for customer retention.

• Structure

Simplify. Make your organization easy to work
in and work with.

Promote cooperation and the exchange of
information across the whole company.

Put your best people closest to the action.
Critical thinking is absolutely essential
for ultimate action advantage to exceed
stakeholders’ expectations.

Establish systems for the seamless sharing of
knowledge.

Managers spend hours agonizing over how to
structure their organizations. Winners show that
what really counts is whether structure reduces
bureaucracy and simplifies work. Structure follows
strategy; adapt structure when need arises.

• Culture

Inspire all managers and employees to do
their best.

Empower employees and managers to make
independent decisions and to find ways
to improve operations. Critical thinking is
developed at all echelon levels of decisionmaking.

Reward achievement with pay base
on performance, but keep raising the
performance bar.

Pay psychological rewards, in addition to
financial ones.

Create a challenging and satisfying work
environment.

Establish and abide by clear company values.

Organisational culture advocates sometimes
argue that if you can make the work fun, all
else will follow. The study suggests that holding
high expectations about performance matters
a lot more. Critical thinking tells us that culture
takes time to nurture. There are five stages of
organisational development to reach maturity.

Organisational Behaviours at Secondary
Management Practices:

• Talent

Fill mid- and high-level jobs with outstanding
internal talents.

Create and maintain top-of-the-line training
and development programs.

Design jobs that will intrigue and challenge
your best performers.

Keep senior management actively involved in
the selection and development of people.

Winners hold on to talented employees and
develop them into holistic, systems, and critical
thinkers to avoid procrastination of decision
making.

Apply new technologies to enhance all
operating processes, not just those dedicated
to designing new products/ services, i.e. total
solutions treatment.

An agile company turns out innovative products/
services and anticipates disruptive events in
an industry, rather than reacting when it may
already be too late. The future competence of a
world-class organisation is its ability to integrate
resources for optimisation, implement strategies
faster-better-cheaper for its entire supply chain,
innovate continuously resulting in improvements
and breakthroughs in products and services as
total solutions provider.

Think before you act. Critical thinking is not good
enough, so is holistic thinking; systems thinking is
inadequate without holistic and critical thinking.
To be sure we need all three thinking skills to fully
appreciate and understand the whole situation.
Hence, the need for whole brain thinking, in short,
Wholistic Thinking!

PROFESSOR DR
K C CHAN
Professor KC Chan is
a practice professor
and strategic project
management and
international business
consultant

PRISCILLA
Priscilla Tanjung is
a final year honours
degree student at Petra
Christian University
(Surabaya, Indonesia)
specialising in
International Business
Management

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